Issues with MGNREGA

GOVERNANCE/ ECONOMY

• GS-2: Government policies and interventions for development in various sectors
• GS-3: Indian Economy and issues relating to planning, mobilization, of resources

Issues with MGNREGA

Context: Enacted in 2006, the Mahatma Gandhi National Rural Employment Guarantee Act aims to provide at least 100 days of unskilled wage employment to adult members of a rural household

It has increased incomes for rural poor (nearly 14.7 crore active workers), controlled migration to urban areas and acted as lifeline during times of economic distress and natural calamities.

Issues with MGNREGA

• Even as the number of people seeking work in 2020-’21 increased to 13.3 crore, the highest ever, the government allocated 35% less funds for the programme in 2021-’22
• Nearly half the total MGNREGS budget (revised) for 2020-’21 had already been spent in the first four months of this financial year leaving just half to be spread over the rest of the year.
• It is estimated that to provide 100 days of work to all job card holding families, Rs 3 lakh crore would be needed.
• All households, on average, received 52 days of work, as against the promised 100.
• Government is unwilling to provide more than 100 days of work. A lack of regular income means workers are constantly in debt.
• MGNREGS expenditure accounts for 47% of GDP. This is much lower than the 1.7% recommended, by World Bank economists, for the optimal functioning of the programme
• Workers continue to face the issue of payment delay.
• Inadequate wage increase and wage delays have made workers reluctant to take up work.
• The MGNREGS wages of at least 17 of the 21 states are lower than the state minimum wage for agriculture, and the shortfall is in the range of 2-33%.

Way Forward

• MGNREGS has a provision for an additional 50 days of wage employment during drought and natural calamities. The government must consider 2020 and 2021 as disaster [years] and extend the number of workdays
• The government should change regulations on permissible work that can be undertaken in MGNREGS to accommodate pandemic restrictions
• In the ongoing economic slowdown, MGNREGS wages must be increased and at least brought up to states’ respective minimum wage for agriculture, so as to spur spending by poor households
• Government must increase its budgetary allocation and ensure immediate payments for work done.
• Government should also make health insurance mandatory for all MGNREGS workers

Connecting the dots:

• DUET (Decentralised Urban Employment and Training) for urban areas
• Urban Jobs Safety Net
• A moment to revive MGNREGA